Burned by the Market? Try These 2 Passive Investments Instead
There are two very broad types of investing -- active and passive -- which refer to the way funds are managed. Active management means the portfolio manager actively trades in and out of the portfolio to help the fund beat its benchmarks based on his or her investment criteria or other factors.
Passive management is a more hands off approach, as the fund invests in a benchmark or index. Over the past decade, passive investments have outperformed active funds, on average, due to the long bull market that ran throughout the 2010s.
While active management is typically related to fund management, it could also apply to individual investors, like day traders and swing traders, who trade stocks frequently trying to time the market and ride the wave for short-term gains. But that can go the other way, too, as you can be left holding the bag when the stock heads south and you end up selling for a loss.
Source Fool.com
